ISLAMABAD: Pakistan will have to pay 4 % interest on loan sought from Saudi Arabia last year .
Finance minister , Shaukat Tarin , on Friday told the Senate that Pakistan had received $ 3 billion as loan from Saudi Arabia in December last year to plug off its alarmingly fast growing budgetary gap and it will be returned to the Kingdom in a year with 4 % interest rate. High interest rate of 4 % on loan from Saudi Arabia is enough to prove that no free lunch is available for Pakistan any where in the world not even in Saudi Arabia which was known for its facilitation role in it’s difficult times.
The upper house of Parliament was also informed by the Finance minister, Shaukat Tarin, that Pakistan will start availing Saudi oil on deferred payment from next week.
Pakistan and Saudi Arabia had signed an agreement last year during prime minister, Imran Khan’s visit to the Kingdom.
Pakistan’s dependence on loans is increasing alarmingly as its economy is not showing healthy trends for years. In particular, Pakistan’s poor revenue collection and prodigal spending is putting its already fragile economy in a state of fix.
A careless policy – making by the concerned authorities has made the recovery challenge of Pakistan’s economy difficult if not impossible.
Islamabad seems unable to take the rising trend in petroleum product prices in the world market in post Corona situation and for the same the government had decided to seek oil facility from Riyadh on deferred payment. Saudi Arabia responded to Pakistan’s positively .and agreed to provide facility of deferred payment of $ 100 million per month for one year. Total oil facility of Riyadh for oil supply on deferred payment would be $ 1.2 billion.
Pakistan’s oil import bill for one full year stand around $ 10 billion . It may cross even this number as oil prices in the global market are on the rise in the post Corona times .
Saudi Arabia had granted the oil facility for Pakistan on deferred payment of 6 month in 1998 when the latter was facing biting financial burden after facing sanctions for conducting nuclear tests in response to Indian nuclear detonations.